Inogen's (INGN) Q2 Earnings Beat Estimates, Revenues Miss

Inogen, Inc. INGN reported second-quarter 2020 earnings per share (EPS) of 12 cents against the Zacks Consensus Estimate of a loss of 8 cents. However, the bottom line fell 73.3% from year-ago quarter.

Revenues of this company came in at $71.7 million, which missed the Zacks Consensus Estimate by 10.1%. On a year-over-year basis, the top line dropped 29.1% mainly due to the impact of the COVID-19 pandemic.

Segmental Details

Revenues at the Sales segment amounted to $65.6 million in the quarter under review, down 31.6% on a year-over-year basis.

Rental revenues grossed $6.1 million, up 16.9% from the year-ago period.

Revenues by Region & Category

Business-to-business revenues in the United States amounted to $21.6 million, down 27.3% on a year-over-year basis. Per management, the decline was primarily owing to reduced demand from home medical equipment providers and resellers of portable oxygen concentrators.

Internationally, this segment recorded revenues of $13.9 million, down 38.5% year over year and 37.4% at constant currency. Per management, the decline was primarily led by temporary shutdown of certain European respiratory assessment centers due to the COVID-19 pandemic and continued tender delays in few European markets.

Direct-to-consumer revenues fell 30.9% year over year to $30.2 million in the quarter. Sales were adversely impacted by the COVID-19 public health emergency (PHE) due to the lack of mobility from government mandated stay-at-home initiatives and economic uncertainty.

Inogen, Inc Price, Consensus and EPS Surprise

Inogen, Inc price-consensus-eps-surprise-chart | Inogen, Inc Quote

Margins

In the second quarter, gross profit was $32.7 million, down 34.8% year over year. Gross margin came in at 45.7%, down a significant 400 basis points (bps).

Loss from operations in the quarter was $2.4 million against the year-ago quarter’s operating profit of $12.1 million.

Guidance

Due to the uncertainty around the impact and scope of the COVID-19 pandemic on its business, the company has not issued any quarterly or full-year guidance.

Wrapping Up

Inogen ended the second quarter on a mixed note. The company saw growth in revenues within its Rental segment. Increased patient interest in the company’s products sequentially was observed in May and June. Inogen expects the business-to-business arm to be a strong contributor to revenues in 2020, thanks to the Tidal Assist Ventilator.

On the flip side, the company reported decline in business-to-business international and domestic revenues in the quarter under review. Also, decline in direct-to-consumer revenues during the quarter is concerning. The significant contraction in gross margin and the operating loss add to the woes.

Zacks Rank and Key Picks

Inogen currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader medical space are Thermo Fisher Scientific Inc. TMO, PerkinElmer, Inc. PKI and OPKO Health, Inc. OPK. While PerkinElmer carries a Zacks Rank #1 (Strong Buy), the other two sport a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Thermo Fisher reported second-quarter 2020 adjusted EPS of $3.89, beating the Zacks Consensus Estimate by 45.7%. Revenues of $6.92 billion outpaced the consensus mark by 0.1%.

PerkinElmer reported second-quarter 2020 adjusted EPS of $1.57, surpassing the Zacks Consensus Estimate by 68.8%. Revenues of $811.7 million outpaced the consensus mark by 1.3%.

OPKO Health reported second-quarter 2020 EPS of 5 cents against the Zacks Consensus Estimate of a loss of 7 cents per share. Revenues of $301.2 million surpassed the consensus estimate by 28.4%.

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